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CHAPTER 5 The validity of and law applicable to online arbitration agreements

Online Arbitration


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CHAPTER 5

The validity of and law applicable to online arbitration agreements

5.1 Validity of online arbitration agreements

5.1.1 The recognition of forming arbitration agreements via electronic communications

An arbitration agreement means ‘an agreement to submit to arbitration present or future disputes or differences (whether or not contractual)’. 1 The UNCITRAL Model Law on International Commercial Arbitration defines an ‘arbitration agreement’ as ‘an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not’. 2 The China International Economic and Trade Arbitration Commission (CIETAC) Online Arbitration Rules also defines an arbitration agreement as ‘either an arbitration clause incorporated in a contract agreed by and between the parties or any other form of a written agreement between the parties providing for the settlement of disputes by arbitration’. 3 It further explains that an arbitration agreement shall be in writing. It is in writing ‘if it is contained in a tangible form of a document, such as a contract, letter, telegram, telex, facsimile, electronic data interchange (EDI), or email’. 4 In short, an online arbitration agreement means that an arbitration agreement is formed via electronic communications. Online arbitration is one of the most complicated applications in the ODR processes as its non-localisation challenges the traditional concept of ‘the arbitration agreements’, ‘the place of arbitration’ and ‘the place of arbitral awards’. It leads to the legal uncertainty of the validity, jurisdiction and applicable law, and enforceability of the arbitration agreements and arbitral awards. Consumer arbitration often encounters different interpretations of the validity of pre-dispute arbitration clauses or agreements in different countries. International commercial arbitration usually involves more


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than one system of law or of legal rules and is a network of a complex interaction of laws, 5 which mainly include: 1) law applicable to the arbitration agreement and the performance of that agreement; 2) law applicable to the substantive issues in dispute; 3) procedural law applicable to the arbitral proceedings (lex arbitri); 4) conflict-of-laws rules applicable to the arbitral proceedings and international arbitration; and 5) law governing recognition and enforcement of arbitral awards (e.g. the New York Convention 1958).

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